Health coverage switch benefits both sides

Associated Industries will change health insurance carriers Dec. 1, terminating a 53-year relationship with Premera and starting anew with UnitedHealthcare.

Associated President Jim DeWalt says the switch will expand the number of plans available to members of the employer group, as well as the circle of businesses who can buy coverage. United, which has not sold association plans, enters a new market served by agents in Washington and North Idaho.

The development should sharpen competition for employer plans, perhaps providing some check on the rising cost of purchasing health insurance. Rates for small groups had climbed at a double-digit pace in recent years. Premera’s rates jumped almost 15 percent Jan. 1.

“It kind of shuffles the deck,” says Keith Vanderzanden, a Wells Fargo Insurance Service senior vice president who helped pair Associated with its new carrier. “United is stepping into a market that they believe, and we believe, they can be very successful in.”

The deal follows by two months a Spokane County Superior Court ruling that sanctioned Associated’s long-time practice of rating member firms individually, not as one group, but DeWalt says the hunt for a new insurance carrier started before the dispute over that issue arose with the Washington insurance commissioner.

He says participation in the Associated health plan had been declining, in part because Premera would not insure employers with more than 50 workers. Long-time association members were growing their way out of Premera coverage through Associated.

“That hurt,” DeWalt says.

United, which had focused on big employers such as Washington Mutual, will allow Associated members with up to 99 employees to participate.

“That’s a huge advantage for us,” DeWalt says. United can offer more plans and answer positively the question asked most by concerned employers and employees: “Is my doctor included?”

United has contracts with more providers than Premera, he says.

Before United stepped up, DeWalt says, the only alternative insurance provider was Asuris Northwest Health, which offered plans and rates not sufficiently different from Premera’s to justify ending a half-century relationship.

“There wasn’t a competitive force at plan,” he says, adding that Associated had considered self-insurance, but found itself hemmed in by state mandates that ruled out that alternative.

DeWalt says he cannot compare rates because there are too many variables based on the coverage and number of employees.

By partnering with United, Associated stands to gain more than just a new health insurer.

While looking for an alternative to Premera, Spokane-based Associated extended into Western Washington the network selling its Premera plans. Access to that distribution channel helped cement the alliance with United, DeWalt says. A reputation for being an excellent administrator of its plans helped, too.

The deal will also enable Associated to sell health insurance to North Idaho members who could not access the Premera plan because that state is covered by a different “Blue” insurer.

With its footprint set in Western Washington, Associated can begin to offer some other services deliverable over the Internet, such as electronic payroll. The group also provides human resources help at two Spokane companies, and industrial hygiene and safety consulting.

“We need to grow,” DeWalt says.

He says the insurance agreement is probably the biggest change at Associated in some time.

Founded in 1910 to help small businesses with collective bargaining, Associated seems not to have lost its touch.